The Tatuanui-based co-operative paid its shareholders $11.30/kgMS for the 2021-22 season’s milk despite a 6% drop in milk production.
Tatua chairman Stephen Allen told Rural News that he was “cautiously optimistic” for another reasonable season.
This is despite a slow start to the 2022- 23 season, with milk production 6% behind compared to this time last season.
Allen says while a very dry summer and late autumn impacted milk production last season, for the first few months of this season farmers faced too much moisture.
“But with strong returns we are cautiously optimistic of another reasonable year,” he says.
Allen says the company is keeping an eye on global the supply/ demand situation and geopolitical tensions around the globe and will provide an update to its farmer shareholders later this month.
Tatua’s record payout eclipsed final payouts announced by Fonterra ($9.50/kgMS) and Synlait ($9.59/kgMS). Total income reached $444 million, with $186m earnings available for payout. This equates to $12.65/kgMS – the co-op retained $1.35/kgMS for reinvestment.
Last year, its earnings topped $10.43 and farmer suppliers received $9.25/ kgMS, another record payout.
Allen says Tatua farmers are very appreciative of the record payout in a season “which wasn’t fantastic”.
“Farmers have a lot on their minds, it’s been hard going and no one has stopped since the pandemic.
“The payout will support them on farm with things like feed purchase and meeting increased on-farm costs.”
Allen says in deciding the payout the company was “very conscious of the sharp increases in on-farm costs being experienced by our shareholders, as well as the requirement for continued investment in the business and maintaining balance sheet resilience in what remains an uncertain economic and global trade environment”.
Tatua’s gearing (debt divided by debt plus equity) averaged 21% for the year, but was slightly higher at year end, reflecting increased inventory holdings at balance date.
Allen says the Tatua performance story is very much a team effort led by “our highly capable chief executive Brendhan Greaney”.
